What is blockchain?

Decentralized Write-only Ledger

The blockchain is a decentralized, write-only ledger. Picture an old fashioned accounting ledger book. Entries can be written, but not changed or erased. Of course, if someone has physical control over a ledger book they could try to erase or change a record or even pages of data. But this is what makes the Blockchain such revolutionary technology.

How it works

It protects records in two ways: First, it only allows authorized computers to add entries. These entries are called blocks. It is not possible to modify or delete blocks once added. Second, the entire sequence of blocks (hence, “blockchain”), is copied all over the world so that even if someone were able to make changes in one place, the ledger then wouldn’t match with all of the other copies. The discrepancy would be easy to detect.What if it would be really convenient to have these features without making the information in a block publicly accessible? That works too. The safety features work even if the data is encrypted. So it is possible to verify that the data is intact even when it is not possible to read the actual information in a block.

What Blockchain Can Do

What can a block hold? Any form of data can be copied to the ledger. Financial transactions, contracts and electricity consumption are just a few examples — ones that happen to be highly relevant for utilities, customers and communities. One of the things that the blockchain can do is help automate transactions. Because its records are trustworthy and auditable, computers can handle them automatically. That means that the rapidity and volume of transactions is less of a problem.

Why this matters for utilities, customers and communities

This is huge for micro transactions, for example, between utility customers on a micro grid. A customer with rooftop solar can sell power to another household nearby without taxing the larger grid. For customers, this can help them recoup the costs of renewables like rooftop solar, or even put a little very green currency in their wallets. For utilities, it means greater efficiency, better demand management and decreased loads on aging infrastructure. Utilities that facilitate these transactions also gain valuable data that they can use in making more strategic infrastructure upgrades and they can reap the rewards of greater customer satisfaction as trusted advisors in the process.

This video does a great job of explaining in some more detail if you want more.